Preheat oven to 350°F (175°C). Grease a 9x13-inch baking dish.
Prepare the red velvet cake mix according to the package instructions using the water, eggs, and oil.
Bake the cake for 25-30 minutes or until a toothpick inserted into the center comes out clean.
Let the cake cool for 10 minutes, then use the handle of a wooden spoon to poke holes evenly across the cake.
Pour the sweetened condensed milk over the cake, letting it seep into the holes. Allow the cake to cool completely.
In a large mixing bowl, beat the softened cream cheese until smooth. Add the powdered sugar and vanilla extract, mixing until well combined.
Gently fold in the whipped topping until the mixture is smooth and creamy.
Spread the cream cheese frosting evenly over the cooled cake.
Chill the cake in the refrigerator for at least 2 hours before serving.